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New Flyer Industries TSX: NFI and NFI.DB.U North America’s #1 Transit Bus Manufacturer and Parts Supplier New Flyer Industries TSX: NFI and NFI.DB.U Forward Looking Statements: May contain forward-looking statements relating to New Flyer Industries Inc. and related companies or to the environment in which they operate, which are based on their operations, estimates, forecasts and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond New Flyer’s control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in New Flyer’s Annual Information Form which is available on SEDAR at www.sedar.com. New Flyer assumes no obligation to update or revise any forward-looking statements to reflect new events or circumstances, except as required by applicable securities laws. All figures are in U.S. dollars unless otherwise noted. Non-GAAP Measures: For the definition and explanation of EBITDA, ADJUSTED EBITDA and FREE CASH FLOW please refer to Appendix A. March 20, 2015 2 Executive Summary New Flyer Investment Highlights Leading North . Approximately 48% of heavy-duty delivered buses in 2014 (equivalent units) American Market Share . Approximately 33% aftermarkets parts market share based on 2014 sales Deep Relationships . Established relationships with well over 380 transit authorities who operate approximately 87% of the with High Quality heavy-duty transit buses in the U.S. and Canada in 2014. 24 out of 25 largest transit agencies operate Customer Base New Flyer, NABI or Orion buses Leadership in Product . Market leader with a proven next generation Xcelsior transit bus platform Offering and . Most transit propulsion options: diesel, natural gas, electric trolley, diesel-electric hybrid & battery-electric Technology . Leading in-house engineering and new product development capabilities . With approximately 80,000 heavy-duty transit buses currently in service (Can/US), the company supports Well Positioned the largest installed base with over 50% being New Flyer, NABI or Orion buses Against Competitors . Integrated aftermarket parts and services operation . Compliance with Buy-American legislation and Canadian provincial policies regarding Canadian content . Focused on completing the integration of NABI into New Flyer providing overhead and supply synergies Multi-Faceted Growth . Growth of “clean technology” aligned with New Flyer product offering and engineering capabilities Strategy . Monitor a robust pipeline of M&A opportunities to diversify product offerings and geographic footprint . Deep industry experience and track record to position the business for growth and increased profitability Experienced . Proven ability to complete and integrate strategic acquisitions Executive Team . Extensive LEAN transformation and operational experience . Strong/Predictable free cash flow supported by attractive EBITDA margin and high cash conversion ratio Strong Free Cash Flow Generation . Low operating leverage with fixed costs representing approximately 10% of total bus manufacturing cost structure Source: Company filings, management estimates March 20, 2015 3 New Flyer Strategy Defend, Diversify and Grow To be a diversified, profitable and market leading Bus Manufacturer 1. Offer North American bus operators the best transit buses and services in the industry Provide a full offering: Bus, Parts & Support Services that are the “Workhorse of the Fleet” Lead the market innovation Migrate to the Xcelsior platform for Heavy Duty buses Offer MiDi as alternative for community shuttle, small transit agencies and private operators Increase focus on aftermarket 2. Operate as a world class manufacturer using LEAN principles and deployed Quality Roadmap Migrate from selling buses, to providing solutions… that deliver best bus value and support for life Be recognized as an Employer of Choice Excel in supply chain, strategic sourcing and appropriate in-sourcing Continuous pursuit of eliminating waste and cost reduction to improve competiveness Excel at customer support, response and follow up 3. Perform while seeking Diversification and Growth Operate with an appropriate capital structure and conservative leverage Seek to diversify beyond Heavy Duty Transit only to compete in more than markets: Product (type of bus) and/or Market (Public vs Private) and/or Geography (NA or International) March 20, 2015 4 Strategically Executed Transformation NFI positioned for Sustainability, Diversification and Growth 2011-12: NFI converted from IDS(1) to a Common Share structure 19.99% equity Announced plan to Convertible debt investment by world’s rationalize NABI to Production Launch of issued and terminated #2 bus manufacturer build New Flyer ® ® new Xcelsior HD remaining IDSs Xcelsior platform transit bus platform Brazilian based, delivers over 30,000 buses annually Launched battery- electric bus 2010 2011 2012 2013 2014 Acquired U.S. parts Announced MiDi® JV Acquired Acquired U.S. fabrication business with Alexander Dennis Canadian and transit bus and U.S. based fabricator and Limited U.S. parts parts business supplier of interior ADL is UK’s largest bus and business North America’s #4 lighting and stanchions coach builder and a North America’s #4 bus OEM & #2 world leader in double deck bus aftermarket aftermarket parts and mid-sized bus parts business business New Flyer positioned to capitalize on opportunities going forward Source: Company filings 1. New Flyer ‘s IPO was in 2005 on the TSX as an Income Deposit Security (IDS). March 20, 2015 5 Leading Market Share for both HD Transit Bus & Parts Heavy-Duty Transit Bus Share Aftermarket Parts Share based on EUs delivered in 2014 based on estimated parts sales in 2014 Other (incl. El Dorado,and Proterra), MCI ABC Companies 4% (Muncie - Baker) Prevost/Nova 5% Neopart 6% 2% Mohawk 5% 2% Other Transit Brokers 2% Gillig Bus Service Facilities 10% 4% 6% 33% Engine & Transmission Part Vendors 10% 10% 47.5% 33% Local Suppliers 9% New Flyer 33% Truck/Common Parts 15% Suppliers 8% Bus Component Vendors Direct 5% Source: 2014 New Flyer Database & Management Estimates March 20, 2015 6 North American Transit Bus fleet estimated >80,000 buses* Market Segments 8000 24 of the 25 largest Transit Agencies Other Orion New Flyer NABI and primary targets 7000 operate NF supported buses 6000 Metropolitan Urban Municipal Fleets Fleets Fleets 5000 17 operators 200 operators 900+ Operators 39% of 45% of 16% of installed fleet installed fleet installed fleet 4000 3000 Primary Target market 2000 Primary Target market 1000 0 Primary Target market Miami Seattle Boston Ottawa Everett Denver Toronto Newark Calgary Phoenix Chicago Houston Montreal Baltimore NewYork Pittsburgh Edmonton Las Vegas Las Vancouver Minneapolis Los Angeles Los Philadelphia San Francisco San Orange County Orange Washington D.C. Washington New entrants focusing on battery-electric buses: *Quantities in Equivalent Units (EUs) Current US & Canada Active Transit Bus Fleet ~ 80,000 EU Other 31% 10% 12% 21% 9% 17% Source: 2014 New Flyer Database & Management Estimates March 20, 2015 7 Company Overview Current Transit Bus Models New Flyer Xcelsior® New Flyer MiDi® NABI BRT & LFW(1) LFW BRT Production launch in 2009 based Joint venture with ADL to bring 31’ and 40’ (LFW) and 42’ and 60’ on >20 years experience with low MiDi® to North American market (BRT) buses floor transit buses Production launch in 2014 Propulsion using clean diesel, Offered in 35’, 40’, and 60’ lengths 30’ and 35’ low-floor bus electric-hybrid, and natural gas >12-year, 500,000 miles life >12-year, 500,000 miles life Estimated installed fleet: 10,000 Multiple propulsion systems Clean diesel propulsion and options: diesel, hybrid, natural gas, currently investigating natural gas (1) Both LFW and BRT are being trolley and battery-electric and battery-electric phased out and replaced with the New Flyer Xcelsior® platform in 2015 . Primary targets are metropolitan Primary targets are municipal and and urban fleets commercial shuttle markets Typical sale price of approx $450K Typical sale price approx $300K US US for 35’/40’ bus and $700K US for 60’ articulated bus March 20, 2015 8 Market Leader in Technology & Propulsion Options Battery-Electric Single platform - multiple propulsion options Hybrid-Electric Natural Gas Electric-Trolley New Flyer’s battery-electric Xcelsior® .Pilot bus testing complete and in service. Clean Diesel .2 electric buses delivered to Chicago in 2014 .4 buses delivered to Winnipeg in 2014 .Electric 60’ artic in development Focused on New Flyer’s optimized and robust Xcelsior® platform March 20, 2015 9 Significant Investment in Operations Key Operational Improvements since 2010: . Build in Station (by task) improved from 87% to 95% . Average Labour Efficiency increased from 71% to 89% . Days in Customer Acceptance reduced from 21 to 16 days Focused investment on both cultural and physical change March 20, 2015 10 Company Overview New Flyer Bus and Aftermarket Locations 3,300 team members with approx 1,300 covered by CBA Winnipeg, MB Parts Distribution Headquarters Winnipeg CBA expires Mar 31/15 NFI Parts Fabrication and Bus Assembly Manufacturing & Service New Product Development NFI Parts Distribution Center Crookston CBA expires Dec 31/15 St Cloud CBA expires Mar 31/17 BC PE Arnprior, ON AB Service Center SK MB QC NB ON NS ME Renton, WA WA Service Center MT ND VT Brampton,
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